1 take the virtual tour of the chicago board options, Ask an Expert

Finance

1. Take the virtual tour of the Chicago Board Options Exchange at the following Web site. Then describe in a 1-page memo, for someone who has never visited an options exchange, what you "saw." (http://www.cboe.com)

2. Targezept Bionics, Inc., has a common stock outstanding that sells for $21 per share. A call option on the stock has an exercise price of $20 and will expire in three months.

Based on an analysis of the stock's past volatility, you have estimated the standard deviation of returns to be 0.6. The short-term interest rate is now 5 percent and you expect that to remain constant over the next six months. Use the Black-Scholes option pricing model to estimate the value of this option.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92088464

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